Forty Percent Of Workers Made Less Than $20,000 Last Year

Nearly 40 percent of all workers in the country made less than $20,000 last year, according to data from the Social Security Administration, which doesn’t include figures on benefits such as health insurance or pensions. That’s below the federal poverty threshold for a family of four and close to the line for a family of three. On average, these workers earned just $17,459.55.

Meanwhile, more than half of all workers made less than $30,000, not much more to live off of. Wider Opportunities for Women has estimated that a two-income family with two children needs to bring in nearly $72,000 a year to simply reach economic security. Two earners at this level won’t achieve that status.

As David Cay Johnston notes, the median wage was $27,519 in 2012, at the lowest level since 1998. That means half of all workers made more and half made less. But the average wage actually grew. “When the average wage grows but the median wage stagnates, it means that, statistically, only workers in the top half of the job market are experiencing increases,” he writes.

His analysis shows that most of the wage growth was for the top quarter of earners, or those who make about $50,000 and up. In fact, things are very good at the top. The number of workers making $5 million a year or more jumped by nearly 27 percent over 2011, and their total wages grew 40 percent, or 13 times the increase for all workers.

This income inequality has been growing since the 1970s, as the richest 20 percent of Americans saw their income grow much faster than the bottom 20 percent. But things have accelerated in the economic downturn. For the past three years, those at the top of the income ladder saw their incomes grow by 5 percent while everyone else’s income dropped. The top 10 percent of the country’s earners took home half of the income in 2012, the largest amount on record.

And things at the bottom have been declining. The bottom 60 percent of earners have experienced a “lost decade” of wage growth, seeing their compensation fall or stagnate. Many forces have contributed to this trend, butthe growth of low-wage jobs that replace middle class work during the recovery has helped it along.

We created these conditions by creating a significant surplus of people who are absolutely desperate for any job, any wage. As for how much money people need: Well, we had decided that those who were getting by on $4k welfare aid were living in such unreasonable comfort that they lost their incentive to work. Using this same logic, we can conclude that low wages serve to give people the incentive to work harder, working their way up.